Loss of ATE status due to late actuarial certificate

A pension with Asset Test Exempt (ATE) status is a very valuable thing.  If a pension has ATE status, then for the purposes of the Centrelink assets test, the capital value of the pension is either not counted at all (full or 100% ATE) or counted only as to 50% (partial ATE).  To retain this status, an actuarial certificate in respect of the pension must be provided to Centrelink for each financial year.  This certificate must be provided by 21 January of the financial year to which it relates.  If the certificate is not provided by the due date (or the certificate is negative) the pension will lose its ATE status.

In the Wightman’s case, a certificate was provided but after the due date.  An extension to lodge had been requested and been granted by a Centrelink officer.  Not only was the certificate provided within the extension period but the certificate was positive (ie that certificate confirmed that there was a high probability that the fund could pay the pension payments as and when they were due).

Unfortunately, Centrelink held that, despite the granted extension and the positive certificate, the pension lost its ATE status on 1 January.  The loss of ATE status was referred to the Administrative Appeals Tribunal (AAT) which held that as there is no statutory basis to grant an extension the grant was ineffective and could not override the express terms of the legislation which required the certificate be provided by 21 January.  Consequently the loss of ATE status was confirmed.

Clearly the lesson from this case is to lodge the required actuarial certificates on time.

The AAT decision is reported as Wightman [2017] AATA 1057.